Russian oil company suspends CEO over property deals

25 February 2009

London-based Russian public limited company Sibir Energy has suspended its chief executive officer, Henry Cameron from all his executive duties pending investigation into the real estate dealings with one of its largest shareholders.

Last week, the company had requested the London's AIM stock exchange for suspending all trading in its shares after it was revealed that one of its major shareholders, Shalva Tchigirinski, a Russian property tycoon, owed the company $325 million, nearly three times the amount than earlier thought.

Tchigirinsky along with his business partner Igor Kesaev, holds a 46.7-per cent stake in Sibir Energy and through Bennfield, an investment arm of Tchigirinsky, owes the energy company around $325 million and not $115 million that the company had declared earlier to the London Stock Exchange.

Sibir Energy had made a deal with Tchigirinsky in October to buy some of his properties including the Russia Tower in the Moscow City for $340 million in lieu of Tchigirinski not selling his holdings in Sibir Energy as the Russian billionaire was riddled with losses stemming out from the turbulent Russian stock markets as global oil prices nosedived.

Cameron had at that time said that difficult times call for uncomfortable decisions and emphasised that it far better for Sibir to buy the properties and hold on to the existing shareholder structure.

Many individual shareholders rebelled against the deal, which was abandoned last month but the company, according to its circular had already advanced Tchigirinski $115.4 million for buying the properties, which was discovered last week to be misleading as Sibir had given $325 million and not $115.4 million it had previously announced.